>> was that your ms. america speech. >> you have to get the waves in. >> walks on the beach, romantic strolls. melissa: i love it. >> resolutions are important. it's just a matter of sticking with them. presented nice list, looking over, stay true to its demand for rubber what dreams are. their goals with the deadline. how about that. melissa: the deadline for making more money. what's your percentage? >> 100 percent more with in the first weaker too. that would be good. you know what, money is not important. it's about love, family community. melissa: oh, my goodness. >> this is the truth. and not just saying this. >> lots of stuff. you have me addicted. >> here we go. >> have told you a million times, i wanted to be on the house so bad when i was little. melissa: that's all the "money" we have today. we will see better tomorrow.

"the willis report" is next. ♪ gerri: hello, everybody. i'm gerri willis. the fiscal cliff averted for now. investors staging a party. the dow up 2% to monastic on fire, small-cap stocks setting a new all-time high. why? because the fiscal cliff deal which will be signed by the president probably moments from now will shrink the government. no. spending rises by 4 trillion. maybe investors were excited about lower deficits. no again. deficits continued to climb to 8 trillion of the decade. the estimated deficit reduction, just 650 billion. and oh, by the way, contrary to what you heard, the middle class gets socked with a tax hike. you earn 50,000, get ready to

pay an additional thousands of assam. here with details, scott hodge, president of the tax foundation. thank you for coming in. let's get into the details of this behemoths, a huge bill, starting with the average tax increases that people are going to face here. if you're making 50,000, 75,000, as i said, 822 will be your increased tax, what you will owe, and it just keeps going. >> well, that's exactly right. that, the tax increases in the middle class will come from the exploration of the temporary reduction in apparel tax which was reduced, as you know, 2 percent. that goes away, and so our payroll taxes will go up. the average taxpayer will see an increase of the thousand dollars gerri: is circles within circles. we talk about the bush income taxes expiring. you're not talking about the payroll tax, social security income tax. we put that in place. it was stimulus.

this will really catch the middle-class. here is the number that really drove all this home. 77 percent of americans will now face higher federal taxes in 2013. what happened to that promise that we were only going to hit the height of the upper class and a really wealthy people? >> well, the wealthy will see a permanent tax increase thanks to the increase in the top rate from 35%-396%. and for millionaires that is going to be an average tax increase of well over 150,000 per year. certainly the bulk of this tax increase will go to upper income people. it starts and a lower level around 200-250000 a year in income. we will see some of their deductions and exemptions begin to phase out, but the real tax increase will hit those earning over 400-$450,000 per year, hit with those higher tax rates. gerri: layers upon layers of taxes, not just payroll, also

obamacare taxes. the list goes on. ultimately you say, and ' you because you are some knowledgeable about this, you say that it's a bad deal for the economy. >> welcome made really is. because while we were spare from going over the fiscal cliff, our economic model shows that this is a reduced economic growth by one and a half% over the next in years which means that that tax bill will actually raise less than what is actually being predicted. , one-third less. will we see is that for every dollar of tax revenues it actually reduces economic growth but a dollars and $0.50. at think that's a real bad deal for the economy. gerri: unbelievable. that is a bad deal. the uc anything that you like? >> well, there are good things. we can quit talking about the temporary bus tax cuts. this means that we are talking

about the obama tax code. president obama of this tax cut right now. this is all his. for now on, good or bad, he lows with the results of this. gerri: you are so knowledgeable. thank you for helping is out. it is a huge bill. of course, the president will be signing it soon. thank you for your time. >> you bet. gerri: washington's last-minute deal to avert a monster they created has left neither side coming victory, everybody seems to be mad. now moody's is warning, their compromise does not go far enough to protect our country's aaa rating and is urging congress to do more. with more on this, democratic strategist, director of communications for american crossroads and ed rollins, republican strategist and fox news contributor. i'm going to start with you. you have the most experience with these kinds of things. moody's has already saying, ready warning, already sending a

blank saying we're not where we need to be. what do you make of this? >> it's a disaster. you have not only raise taxes on the more well-to-do but basically handicapped yourself. try and raise more revenue. as the grippy have to go to again and there is always a net loss. you take a couple hundred thousand away from someone making a million. it has also split the republican party. clearly put in the speakership in jeopardy. all they're looking for is a horse. pro the have the votes to dump him. that is a terrible place to begin. you still have not got 1 penny from the deficit. gerri: you like this deal. i have to tell you, a lot of your friends on the left don't. what you think it's good? >> that might be one of the reasons. the left is not love it. when you look at this to the first time in 20 years we raised taxes, cut the deficit, and the doe was not even close.

unlike 20 years ago it passed by one vote in the house and al gore had to pass the vote in the senate. the political landscape has shifted out of the feed of the republicans, and they start to seem to know that. they still can't find their footing on any of it, and the warning is afternoon, the first shot across the bal, especially to the republican house not to play games with this next set of talks because that is where the rest of the jobs have to get done. step two of three steps. the third will be the hardest. >> it is not want to negotiate on that. back to the deficit for a second. here is of europe looking at. projected total deficits of the next decade, all we did with this deal, kick the can down the road a little bit. 650 billion in at the -- estimated deficit reduction must not go far enough. it is marry and have a right? >> well, it is not the best policy in the world except for when compared to all the other policies they were considering,

so there were on the brink of actually raising everybody's taxes by a far greater amount which would have harmed the economy much more. so there is that. it's not as bad as it cut a ban. the one thing, it kind of reminds us why we're having the stock. it has been lost. the fiscal cliff was the result of all of the debt that we had been piling up and the tax increase on higher earners which does not fix that. they have to go after entitlements. that is where the rubber is really going to hit the road. gerri: can i tell you something that drives me of the fiscal cliff when i here all these details. for every dollar in spending cuts we got in this deal we got $41 in taxes. 1-41, not 1-1, 1-2, 1-3. how is this sanity? >> it's not. basically have 122 some odd page built the people have three minutes to read.

we should not be doing our government last-minute like this. they put the gun to their own head. the bottom line is, they could have kicked it down. that the new congress deal with this, taken the time to do this appropriately. that promise you dealing with the congress, you're going to have a hard time getting anything done that will reduce the deficit. i would expect my fellow colleagues here on the show, wait for the president to submit his entitlement reform program and see how many democratic votes in bipartisanship there is to that. gerri: speak to that? >> well, that is one of the smartest guys out there. politically he has a lot of good points among but here is what will happen. the president is going to have to reform entitlements, and you will. he will close loopholes. he will make investments. gerri: he backed away from that at every turn. >> campaigned on it. so far at the end of the last turn, beginning of this one, he kept his campaign promises.

the one he made a mistake was banner. he had a better deal at the table last time and then he walked away. he actually, the house republicans make the nhl negotiations look good. if the keeper of the will be just as irrelevant. gerri: to marry and have it right? does the president keep his campaign promises? getting maybe not. >> she did it all. between romney he said no tax increases and obama who said $3 in spending cuts for everyone in tax increases. the next step is to trillion dollars from obama that he needs to propose on spending cuts. that's one of the reasons it went down to the very last minute, one of the reasons that had to go to the senate because democrats did not impose gentlemen reforms. it's all moving to the conclusion. gerri: it's not something they are long gone. i have to tell you. of watched for a long time. they seem to be more interested in paying off friends and cronies and anything else.

>> the only when there was joe biden. gerri: that's really true. >> i think the president and democrats, all of them really will the republicans, at thing that's hard to argue. >> i would totally agree. gerri: that is pretty strong stuff. well, stick around. are coming back after the break in the last you all about the next chapter in the soap opera that is washington d.c. stay with us. this is $100,000.

we asked total strangers to watch it for us. thank you so much. i appreciate it. i'll be right back. they didn't take a dime. how much in fees does your bank take to watch your money? if your bank takes more money than a stranger, you need an ally. ally bank. your money needs an ally. ♪ gerri: well, a brand new session of congress starts tomorrow, but another budget battle looming perris in the debt ceiling. back with me now, democratic strategist, before we move on to

the debt ceiling, i want to show you the breakdown of the vote on the fiscal cliff. among the leaders, this is interesting, the speaker, unusual. he voted yes on that bill. normally does not float. eric cantor voted no. paul ryan voted yes. what does that tell you? >> there is a split the republican party into a certain extent, biden is a big beneficiary. the speaker is the person who lost the game now proven that you cannot produce the caucus. there is no power unless it can produce. the majority voted against. gerri: he said the democrats rode the republicans. what will be the result? >> i think will see. whether he is reelected as speaker, he probably does. if it was by design, they were trying to give everyone cover. if it was by default than they have a lot more problems than

you think. it just strengthens the president's hand going into this next set of negotiations worry not only has public opinion that the business community who oppose him to the nail in his reelection but supported them in this effort and will support him as the republicans try to shut down the deficit or stop from paying the bills. gerri: everything i heard about this plan has been negative. people don't like it, don't want higher taxes on the wealthy and think it constrains small business and reduces hiring. the basic economics of it, forget about the politics. the basic economic system work. how do you think that the private sector is in support? >> obviously was to spoke loud and clear, telling and at the top of the segment. all other business leaders went to the white house, met the president, went and met with republicans until about the concerns. a lot of business leaders who are now with president obama coming to the white house, then going to meet with republicans on the hill trying to persuade them to do the reasonable thing.

in the end they did. the question is, well they now like to hear pat st., were going to shut down the government cannot and pay our bills. gerri: wait a minute. i get there in a minute. i think you're going to see this rally in the stock market come crashing to a halt. it to you, i found this interesting from a grover. the bush tax cuts collapsed at midnight. every vote for the senate bill is cutting taxes and keeping his or her pledge. now, coming from grover i think this is just a little bit surprising. what do you say? >> i think we are overeating into this whole supposes split between republicans, the ones who voted yes in the once you voted no. they were dealt a bad hand, and there were a lot of different opinions among the members on how a play that. you end up with 150 planning one way and the rest plenty of weight. i don't think of a sudden their

is a shift in the republican party will support tax increases this is unlike 1990 where half the republican caucus voted for new tax increases that did not already exist. taxes are going up, trying to find a way to mitigate the damages as much as possible. i think a lot of the guy's head back to the locker rooms, each other on the back and say, well, you know, you have your opinion and i have mine. now they see what the next battle is and that's on spending gerri: exactly. to you, marion was just saying we get to this debt ceiling republicans are saying this is our going to get spending cuts. is that a strategy that works? >> is what we have tried twice before. we really want to basically anti as the american public more than they are today to all you have deduced that this government down. they had to come up with a significant alternative, unify parties, the majority of their own members voting in one way or the other. my argument is it's not a slap on the back.

they lost the moral high ground, the one significant issue that they have always been consistent on. that's basically taxes. they threw them away. gerri: jonathan, your forecast on what happens with the debt ceiling. you brought it up. what do you see happening? >> i disagree. i think this is a special case on taxes. it was historically unprecedented. you have these tax increases that expired. a very different case in 1990 or '83 when they passed tax increases. at the co-ceo of unity among the republicans when they go to the president and say when he began spending. let's see what you have. the president will go back and say, we already cut spending two years ago. moody's will say, you don't count that. new spending cuts. gerri: there's no leveraged. >> except for the debt limit. there will be allowed to go back and say we need because spending. at the debt provides -- it's a shame that moody's did not make that announcement back in december because you would have

seen more movement on the side of the democrats to give a little bit more. gerri: running the government, and i'm still stuck on the ratio. $41 in taxes for every dollar in spending cuts. it's just not right. thanks to my panel, terrific panel. marion, jonathan, at. thank you now we want to know what you think. are america's best yearr behind us? log on to gerriwillis.com, vote on the right hand side of the screen. all share the results of the end of the show. more coming a bit this hour. my breakdown of the fiscal cliff as something in it for everybody from tax breaks for hollywood to the extension of $12 billion in wind power tax credit. why this deal does everything but solve our problem. don't go away. ♪

gerri: call up the friends and family, congress packing pour into its last-minute fiscal cliff bill. all tell you where your taxpayer dollars are headed.

♪ gerri: well you were out enjoying your new year's eve with friends and family, congress had their eye on your wallet. not only did they pass the biggest tax hike in 20 years, they also filled the bill with so much pork may have to start calling at the farm bill. that's right. the deal to raise taxes on families earning $450,000 or more is also full of special guineas for legislators on both sides of the aisle.

the hollywood break, $430 million extension of tax rules that helped found and television production. boy, does hollywood need that. the elite pay for that with extensive campaign contributions . another entertainment industry break and a 70 million for car racing, especially mother had to build raceways. sorry, i mean, an extension of the seven year cost recovery for motorsports facilities. nascar was profitable. then this from the land of great energy. 4 million in tax credits for two and three real electric vehicles something tells me this is not an effort to get act of card in every garaged. maybe a segue. is anyone uses anymore? seriously, the money is for plug-in motorbikes. credits were extended for energy-efficient appliances. by a diesel and renewable diesel. there is a $59 million credit for algae growers.

tax credits to encourage the production of cellulose biofuel. you know what, it's good when they came plexor industry. then there is tax-exempt financing for what is called the new york liberty zone, the area around the world trade center. goldman, ceo white blank fein says thank you very much for the special benefits. i guess that makes up for the smaller bonus pool. the list goes on and on, and there is a railroad operators, 2,202,000,000. unbelievable. here we are flirting with greek style public finances, and congress continues to line the pockets of their friends and family. i don't know about you, but there is some old acquaintances i would like to forget. coming up, more fiscal fallout from the fiscal cliff fight. the markets seem to love it. my next guest is fired up over some of the port. why he thinks the wind energy tax breaks are a disaster and what the real focus of our energy policy should be. stay wwth us.

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>> from fox business studios in new york, here again is gerri willis. gerri: green energy turned out to be a big winner in the fiscal cliff bell. more investment, we can't afford until today. rubber, welcome back to the show. we have $12 billion in tax credits over 10 years grateful we get back? >> gerri, the wind energy advocates push to get their tax

cuts extended great isn't it was not extended, there would be about 37,000 jobs lost. well, he figured this is a 12 million-dollar price tag, we are talking about $329,000 per job. it's an absurd number the one you might write a check and send it out to those people instead of bothering with the wind energy. here is a number that astonishes me. 84% of the infrastructure, wind energy infrastructure, what are you talking about? that is crazy. >> it does not produce electricity when demand is the highest. you can look here in texas where there is more wind energy capacity than any other state. 8.7% of the installed wind

energy capacity as reliable. when demand is the highest, electricity prices are the highest, this is useless infrastructure when it comes to keep demand times. he wants the white house and epa wants to pay for it. expensive. it doesn't work well. why are we even bothering? why don't we let the private sector do it? if it's such a great deal, why do we let them do it? >> i think that you ran down some of these issues in the previous segment when you talked about this fiscal cliff bill being a prime example of spending for congress. you have an extension of the tax credit for three wheeled electric vehicles. i haven't seen any like that. this is another example of congress trying to pick winners in the energy sector and,

unfortunately for this administration, they have this fixation on a lot of energy sources. gerri: don't forget about the algae. [laughter] i think that's going to work? the winner by? i mean, professors and some of skewer cool somewhere. >> the substance of algae has shown some promise. if you can use photosynthesis to produce it on a large scale, maybe it works. one that sticks is the cellulosic ethanol provision. here is an industry that has never produced any sizable quantities of ethanol at market prices, yet they get an extension of the tax credit. the amount of land that would be needed to make it work just boggles my mind. it doesn't work. it can't work. and yet they got an extension of

the tax credits and in this bill. it is another bad example. gerri: let's talk about something that does work. apparently the coal industry is going great guns and other parts of the world, but not very. >> is a remarkable story. i appreciate you bringing it up. if you look at what is happening, u.s. coal consumption is declining rapidly. but what is happening globally, if you look at the report that came out of the iea just last month, they are looking at and reporting on booming global coal production and consumption. over the next five years, it will increase by as much as the u.s. and russia combined. so of this fixation here in the u.s., we are patting ourselves on the back for wind and the other things. global omissions are soaring because of the coal consumption globally, which is part of a

demand. gerri: there is a positive energy stored in the united states. it has everything to do with natural gas. that is the future. and that we were going right now i'm. >> the u.s. now, whether its oil and natural gas, both are incredibly positive stories. the utica shale in ohio, the voc and shale in pennsylvania. the barnett here in new york. they are incredibly positive. we can count on the sierra club to oppose this especially now thanks to matt damon and his new promised land movie. the one thing you for coming on the show. it's always a pleasure to have you. we will do some movie reviews next time. thank you so much for an honest day in 1879, thomas edison began

instruction of his first electricity generator. he originally created the generators to power his other new invention, like all. electricity was so new back then, edison had to build everything, not just the generator. he built the cables right down to the lamp holder switches and sockets. electricity sure wasn't going to be free. but he did create a large-scale electricity grid. and eventually, it was replaced by the inventions of tesla, who worked for edison is a young apprentice. it began with thomas edison on this day in business, january 2 from 134 years ago today. when we come back so i will get

reaction from superstorm sandy victims on congress' inability to act. and the fiscal cliff deal area even if it was a bad one, details on the rally and what to expect for the rest of the week coming up next

gerri: breaking news right now from new york or the state department confirming or the state department confirming secretary of state hillary clinton has been discharged from new york presbyterian columbia hospital. she left with her husband, president bill clinton and daughter chelsea. she was admitted to the hospital on sunday and received treatment for a blood clot in her head.

again, secretary of state hillary clinton discharged from a new york hospital at this hour. some great news there. your 401k getting a nice boost today as markets celebrate a deal on the fiscal cliff. the dow rocketed more than 300 points. the s&p achieving the biggest one-day gain since december of 2011 come all the way back then. the nasdaq is up 3%. a record high for small stocks. scott martin, is with us now. so right here on my list of questions from one of the questions is, can the rally continued. i have to tell you that the futures are pointing down already. how do you handle the situation? >> as we know, the futures market tends to be the ultimate fake out. gerri: is in today's rally sort

of a bit of a fake out? >> i think it is. what are the bigger fake out is the deal we have in congress. [laughter] >> that's really the joke being played on everyone today. all we did was raise taxes on not just the rich, but also everybody in america. not addressing any of the spending cuts and more spending than we can afford the 177% of americans will be paying higher taxes with the numbers we have been using. we have seen the markets trade with the negotiations that were going on in washington. we have several other deadlines coming up. the next one is the debt ceiling. you think the markets will be tied to the news out of washington dc? >> yes, i think they will be very skittish. they are going to love the next couple of months because it will be that way. you are right. he went to all-time highs today

about small-cap stocks. a couple of days ago, the market levels were back where they were in august. it means the market will be volatile. it will move around quite a bit. if you're trading, you really have to buckle your seatbelt or. gerri: you know how the markets. market is. it is like the mood ring for the economy. you know, it changes all the time. it's not always predictable on how it's going to move. even so, i am a big proponent of individual investors investing in stocks. what sectors do you like best right now? >> i like defensive sectors. i like to take advantage of what i think is an overvalued market. have on the taxes, it is a good reason to own them. pharmaceuticals as well. everybody in america is getting prescribed more and more medication, as we know. and so xph is another stock that

has a lot from local companies and. gerri: what don't you like right now? is it the bond market? >> i don't mind the bond market so much, i like google and apple more than treasuries. you get a little bit more bang for your buck. financials i would stay away from. i would stay out of it. gerri: they had some pretty decent earnings though he meant yes, they did. the earnings have sunk the last couple of years. the housing market is tight on credit. gerri: type on credit, still giving taxpayer dollars in today's deal. scott, thank you for coming on. it's great to see you and have a great weekend. >> thank you, u2, gerri.

gerri: there was no shortage of successful product launches in 2012, and yet, some companies despite their best efforts just couldn't get it right. tonight's top five, the biggest product flop of last year. number five, the lumia 900 and number two is the sony tablet. reviews were bad. sales were worse. now, it's discontinued. in disney's animated film "john carter" comes in as a disappointment. number two is a product of detroit, the dodge dart. the worst product flop of 2012, apple maps.

if yes that was so bad that tim cook wrote a public letter apologizing for the mass. still to come, my "two cents more" and the fiscal cliff not ending the harsh words on the hill. lawmakers are fuming over the decision. one hurricane sandy victim gives us her take on a storm package coming up next

gerri: speaker john boehner is under fire after delaying action on a bill for hurricane sandy relief aid. >> we cannot and should not wait. we must not walk away. this is a disaster of a disaster. >> this is an absolute disgrace. speakers should hang his head in shame. gerri: john boehner and others criticized the bill, rightly so, for being loaded with work choices, like the $150,000 allocated for alaskan fisheries. the houses that developed have developed this friday on a down payment of $9 billion for disaster aid. another bogus set, january 15 for the remaining $51 billion.

>> on monday i had a business. on tuesday morning i was repaired tuesday morning i was repaired overnight. when i got there, i have nothing left. >> last month we told you about small business owner diana petrone, whose staten island store was wiped out by hurricane sandy. exactly one month ago, she had nothing great but now she's back up and running. we just heard from her, and she's joining us now on the phone from her store. great to have you with us and thank you for joining us. tell us what is happening? how did you open your doors? >> we opened on friday and it happened with sheer determination and hard work. i'm so proud to say that we are open. we are back up and running. gerri: that is great news. you have released under bunch and struggle, and we are showing pictures

of that. >> the past two months have been mind blowing. i can't believe we got through it like we did. again, we are back in one was there ever a point he thought we would not make it? i will have to close down in a. >> i am not going to lie. i didn't think that to myself. who would not think that? but i am a strong person and i'm a fighter. and i'm grounded by love and determination with everybody in my life that we never gave up. it was never an option. gerri: what i think is so great about your story, and now we see pictures of your store is that you didn't take government money. >> that's right, nothing. everything you see, 99% of it was done ourselves. we were here every day since the

store closed. sometimes work into one or 2:00 o'clock in the morning, no heat up until two days before we opened our doors. we did as much as we could ourselves. everything was with our own money at this point. gerri: did your employees pension? >> yes, our employees have been amazing. every one of them came back. they are all here working. we have the same team. like i said, we are a family and do this together. gerri: here you are, a small businessperson. you can recover from a storm as big as hurricane sandy in only two months. yet when you look at the bigger problems this country faces, it just takes so much more time watching to get around to a solution. tell me what you think. the private sector solution seems to be better? >> it is roll up your sleeves and dive into it. stand around and talk about it.

you can stand around and ponder it. but the real issue is to get things done to make it happen. jump in and just do it. it is frustrating when you hear people going back and forth. they are fighting over issues and small things. you know what, it's not going to solve the problem. people need immediate assistance. they need government officials to get down and dirty into it. understanding what people are going through and not just see it on tv and come down and shake some payments. maybe some of the people, the private sector needs to be more involved in the government and show them how to get it done. gerri: diana, what you're saying is so awesome. roll up your sleeves. i then. get it done. >> i would like to shout out to my meeting customers who supported us and i have been getting hugs and kisses since friday. they are so grateful. what are store represented --

people couldn't imagine us coming back. we came back bigger and better and stronger and so quickly -- he gave everyone hope. it doesn't matter how bad it is, it will be better. we give people hope that we can do it, coming from what we went through, they could do it, too. like i told every customer that comes to my door, we are here to help you now. cherish today entry tomorrow. live today. it will be fine. gerri: your message is just great. i really appreciate your coming on to the show and talking with us. good luck to you and congratulations. we are all cheering you on. >> come down and say hello. gerri: have a great one and good luck. that was just awesome. i will be back my "two cents more" and the question of the day. are america's best years behind us?

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the. ♪ gerri: there is a new gallup poll that shows half of the country feels that our best years are behind us in this country. you agree or are you weary and wary? here is what some of your posting on my facebook page. with the current leaders in the entitlement mentality, it could be unless we see another ronald reagan or even a bill clinton. we have lost not on our financial compass, but our moral compass. i don't hold a lot of hope right now. way behind, and they're not closer than they appear in the rearview mirror. my goodness. come on. we just talked to diana petronas, very optimistic about the future. we asked on gerriwillis.com. 84 percent of use of america's best years behind us. i cannot sign-on. this is where we part company. be sure to log on to gerriwillis.com from my question every we take